This Warren Buffett ‘Disciple’ Says He is Wrong about Bitcoin

Journalist:
May 10, 2018

Tech investor Chamath Palihapitiya considers himself a “disciple” of Warren Buffett, but even he does not think the investing icon is a reliable source on the subject of bitcoin.

Palihapitiya, who served in various management roles during a four-year tenure at Facebook, told CNBC that technology is outside of Buffett’s “circle of competence,” so he is not inclined to put much stock in his thoughts about a cutting-edge digital asset like bitcoin.

“Not everybody is right all the time,” he said.

As CCN reported, the Berkshire Hathaway chairman — along with Charlie Munger, his top lieutenant — went on another bitcoin bashing spree this month in concert with the firm’s annual shareholders meeting.

Speaking at Saturday’s shareholders’ meeting, Buffett said that bitcoin was “rat poison squared” and that cryptocurrencies would “come to a bad ending.”

Munger made similar comments and later claimed in an interview that bitcoin was almost as bad as “trading freshly harvested baby brains.”

Microsoft CEO Bill Gates — who also sits on the Berkshire board of directors — entered the fray as well in post-shareholders meeting interviews, lamenting that he would short bitcoin if there was an easy way to do it (there is).

Palihapitiya, in contrast, said that he recommends investors hold a small amount of bitcoin as insurance against widespread economic crises, which will drag down every asset that is associated with traditional financial markets.

He said:

“My portfolio is 99 percent risk on, one percent risk off. In that one percent risk off bucket, I think that something like bitcoin is really important. Why? Because it’s not correlated to the rest of the market.”

In the past, Palihapitiya has lauded bitcoin for its censorship resistance, alleging that no individual or organization — or government for that matter — has the ability to control it.

“Nobody can stop it because nobody can control it. The idea that the government can put curbs on this is actually pretty specious,” he said last September.

Featured image from Shutterstock.

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.